If you are buying or selling a property, one of the most crucial moments of the process is the exchange of contracts. This marks the point when the transaction becomes legally binding and both parties are committed to completing the sale.
So, when exactly do you exchange contracts on a house sale? The answer is that it usually happens after a period of negotiation, surveys, inspections, and legal work. Here is a breakdown of the typical timeline:
1. Offer accepted: Once the buyer has made an offer and the seller has accepted it, a sale agreement is usually drawn up by the estate agent or solicitor. This agreement sets out the terms and conditions of the sale, including the price, completion date, and any other relevant details.
2. Searches and surveys: The buyer`s solicitor will then carry out a series of searches and surveys to ensure there are no hidden issues with the property. These could include checking for planning permission, environmental concerns, or structural problems.
3. Draft contracts: Based on the results of these checks, the buyer`s solicitor will draft a contract that sets out the full terms of the sale. This will be sent to the seller`s solicitor for review.
4. Negotiations: If there are any issues raised in the searches or surveys that need to be addressed, the two parties may enter into negotiations to agree on how to proceed. This could involve renegotiating the price, asking the seller to carry out repairs, or adding clauses to the contract.
5. Exchange of contracts: Once all the terms have been agreed upon, both parties will sign the final version of the contract. This is when the exchange of contracts happens, usually done through each party`s solicitor, and the sale becomes legally binding.
6. Completion: On the completion date, the buyer pays the remainder of the purchase price and takes possession of the property. The seller must move out and hand over the keys.
It`s worth noting that while the exchange of contracts is a significant milestone, it`s not set in stone until completion day. Either party can still pull out of the sale before this point, although they may be liable for costs or damages if they do so.
In summary, the exchange of contracts on a house sale usually happens after a period of negotiation, legal work, and surveys. It marks the point when the sale becomes legally binding, and both parties are committed to completing the transaction. If you are buying or selling a property, make sure you have a good understanding of the process and seek advice from a qualified professional.